Do You Pay Taxes on Tip Income?

Report tip income

Taxed tip income in the salon industry

This article is being written for salon owners as well as salon technicians.  If you are a employer who has employees, the government expects that you match tip income with FICA/FUTA amounts as you do for wages.  The federal government considers tip income as an income generated through your salon and wants it to be considered taxable wages. .  Currently there is a bill in Congress that is trying to give the Beauty Industry the same rights as the restaurant industry to be able to write this income off as a salon owner which is not a write-off at this time.    The following is an excerpt from a letter written from Bridget Sharpe who is a Government Afairs and Industry Relations Coordinator for the Professional Beauty Association (PBA).  If you would like to write or contact her for information regarding this subject her information is below.   The excerpt reads as follows:

“We are working with several members of Congress and their staff regarding our FICA Tax Credit Legislation. In the 113th Congress, it is very likely we will have a tax vehicle in which to move our piece of legislation forward, so we want to make sure members of Congress have our priorities in mind. This includes Representative David Lee Camp (R-MI) and Representative Sander M. Levin (D-MI). Both are members of the Ways and Means Committee, and will be crucial in pushing our legislation forward.”

Contact Bridget Sharpe at:  15825 North 71st Street, Scottsdale, Arizona 85254

p 800.468.2274 x3437 (480.455.3437) | f 480.905.0708 | c 602.920.7996 |

PBA is a non‐profit membership association. Visit for information.


The following was a previous letter to Washington from the PBA:


PBA Washington Update
Join PBA Lobby Day!

Come to Washington, DC and join fellow professional beauty supporters as we visit Capitol Hill.

On Thursday, October 13, 2011 members of the professional beauty industry will visit congressional offices to ask for their member’s support of the Small Business Tax Equalization and Compliance Act. This legislation will provide a dollar-for-dollar tip tax credit on FICA taxes paid on employee tips. The restaurant industry has enjoyed this tax credit for years, it’s time the professional beauty industry is included too!

Share your story about your business and the professional beauty industry. Please click here and complete the form to participate.

Have questions? Contact Myra Irizarry at 800.468.2274 ext. 3451 or by emailing Myra Irizarry.

PBA Issue Advocacy Fund

PBA’s Issue Advocacy Fund launched at PBA Beauy Week in Las Vegas!  The Fund was created to help finance advocacy and issue campaigns on legislative and regulatory matters important to the industry. It supports the interests of its members, including manufacturers, distributors, salon/spa owners, and beauty professionals. We need your support to make sure that we have the financial ability to be proactive on issues that can affect our industry.

Click here to learn more about the new PBA Issue Advocacy Fund!

Have questions? Contact Myra Irizarry at 800.468.2274 ext. 3451 or by emailing Myra Irizarry.


We are hoping that there is help out there and that they hear our voice on this important issue in our industry…..



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